How would one utilize the FDIC if they needed to?

[Fordiesel69]

So with all this talk about SVB, I was wondering, if someone were conducting a real estate closing and their bank was going thru a crisis (like SVB) and the parties were not made aware, how would one go about getting a resolution? From what little I know about this topic, if that you will not be getting anything for a few weeks at least?

Example, you need to put 100,000 down on a property that you actually have in the affected bank, and then you are going to mortgage the rest, how would you transfer the 100K out of the bank during their internal investigations?

 

[blufeb95]

Largely the FDIC seizes control of the bank and it's business as usual while they audit the bank and liquidate the assets.

 

[PWMDMD]

It’s my understanding you’d see no difference.

 

[JeffKeryk]

You would be informed as to when your funds would be available. It depends on the situation, but the FDIC's job is to protect deposits.
You would likely see no difference, as @PWMDMD posted, at least up to $250K.

Just think of the deals that would be compromised and then the ensuing hysteria! It boggles the mind.

 

[SC Maintenance]

I have seen in on the news both ways - where they take over the bank at night, and the next morning someone else is running the bank -or the bank is closed and the accounts are transfered to another bank - so they will direct you to go there with your paperwork to get your money.

If you have under $250K it isn't something I would loose sleep over.

 

[ragtoplvr]

During a previous crisis my ex wife flew in a charter plane with a team overnight to western Kansas, when the institution opened the next morning they were there along with soon to be ex employees of the previous bank to keep things going. They had printer banner to hang up with the new name. Interviews with all the local news etc. Most of the officers and of course the board of directors was let go after 30 days transition, but tellers etc they kept the ones that wanted to stay. To the customers it was seamless. The armored truck arrived with sacks of cash before opening, ended up they did not need nearly all the cash but it was covered.

Rod

 

[joekingcorvette]

I have seen in on the news both ways - where they take over the bank at night, and the next morning someone else is running the bank -or the bank is closed and the accounts are transfered to another bank - so they will direct you to go there with your paperwork to get your money.

If you have under $250K it isn't something I would loose sleep over.

I would lose sleep.

 

[JavierH19]

I would lose sleep.

If it's insured it's insured. Joint accounts get 250k per owner. Though even the fdic can become insolvent eventually and be unable to credit the bank's customers but not if you're the first one to get bailed out. But the fdic would get bailed out itself anyway by the government just printing more out to meet the demand. They don't have to make sure the money is worth the same as before. But you'd lose temporary access to withdrawals. There are some banks that can insure you multiple times since they have your money in other banks and those banks put you in as a customer with the standard limit. Wintrust is an example.

 

[Malo83]

I wouldn't worry.

 

[PimTac]

I went through this with Washington Mutual. The change to Chase was seamless.

After a year or so Chase started to implement their fees on the accounts after they had said there would be no changes. I then fired Chase.

 

[JavierH19]

I went through this with Washington Mutual. The change to Chase was seamless.

After a year or so Chase started to implement their fees on the accounts after they had said there would be no changes. I then fired Chase.

Same thing with me. Had Wamu till they went bust and got absorbed by chase. But i never paid chase's fees by meeting the minimums. They still sucked since they paid no interest and went to capital 1. Though i may switch to citi or some other bank. Hardly need brick and mortar services anymore.

 

[simple_gifts]

FDIC

Listen to story #2; "Unbreaking the bank" During the 2008-2009, FDIC was taking over (2) banks a week. This story details how and how well it is done.

"Rebranding" is done over the weekend, even the plants are changed

 

[blufeb95]

"Rebranding" is done over the weekend, even the plants are changed

 

[michaelluscher]

Largely the FDIC seizes control of the bank and it's business as usual while they audit the bank and liquidate the assets.

Here's 60 minutes showing the FDIC taking over a bank c.2009
Keep your balance under the insured deposit limit (250k single/500k joint) and you'll be safe

TL: DW the FDIC is a banking industry funded insurance corporation, via premiums assessed on commercial banks
If a bank fails, they step in to run the bank behind the counter and make depositers whole up to the limit, then find a buyer to take/merge/run the bank
Taxpayer dollars are not used to bail out a bank, the insurance premiums they've paid is used
But they are backed by the full faith & credit of the US Govt, and can borrow from Treasury if need be

Going to the bank with a gun and an empty suitcase is not necessary, counter productive, and will probably only make things worse